An operating agreement is an important document for businesses organized as limited liability companies (LLCs). An LLC is a type of business structure that combines elements of both corporations and partnerships. Like corporations, LLCs provide their owners (called "members") with limited liability protection, which means that the members are not personally responsible for the debts and obligations of the business. And like partnerships, LLCs are relatively flexible and easy to set up and operate.

An operating agreement is a document that outlines the rights and responsibilities of the LLC's members and how the business will be run. It is similar to a partnership agreement for a partnership or bylaws for a corporation. An operating agreement can be written or oral, and it is not filed with the state government.

There are several reasons why an operating agreement is important:

It establishes the LLC's governance structure: The operating agreement should outline how the LLC will be managed and how decisions will be made.
It sets out the rights and responsibilities of the members: The operating agreement should clearly define the roles and responsibilities of the members, as well as their rights to participate in the management of the LLC and to share in the profits and losses of the business.
It helps prevent disputes: An operating agreement can help prevent disputes between the members by setting out clear rules for how the business will be run and how conflicts will be resolved.
It can help protect the LLC's limited liability status: A properly drafted operating agreement can help establish the LLC as a separate legal entity and protect the members' limited liability status.

Overall, an operating agreement is an important document for any LLC because it helps to establish the rules for how the business will be run and can help prevent disputes between the members.